Description of the SimVenture Key Business - Term Paper Example

?Business Inserts His/Her Inserts Grade Inserts (21 01, Outline Introduction 2. Description of the key business decisions faced 3. Explanation of which decision was made and why 4. Rationale for why these decisions may be important in a real business context 5. Description of the consequences of the decision on the business 6. Outcome of the simulation 7. Conclusion Business 1. Introduction. SimVenture provides business simulation that facilitates entrepreneurs to learn how to go about business. Decisions in business are crucial and are done by different people at different levels for different purposes. Decisions made are followed to realize the desired outcome in the organization. This paper gives a summary of experiences gained when managing a simulated business with SimVenture Software. A discussion of business decisions and their significance in a real business is explained. 2. Description of the key business decisions faced. There were different decisions that were encountered. Strategic decisions are related to the overall goal of the organization and give direction to management. They are unique and made once. They are not repeated often because they remain as the preserve of the top management. The decision for an organization to adapt a business customer centric is an example of a strategic decision. High level employees collect and analyze necessary information before settling on a strategic decision. Strategic decisions are made to be implemented over a long time (Harvard Business School Press, 2001, p. 2). Tactical decisions are made by middle level managers. Using the knowledge they possess and addition information from various sources they base their decision on their analysis. Tactical decisions are used in the management system because their process is repeated many times in the business. Policies concerning pricing and discounts may be part of tactical decision making. Tactical decisions are created to manage performance so that the overall goal is maintained. Operational decisions are made by the employees at the lowest level. They are made very often, for instance when an employee is selling a product to a customer. Operational decisions are made daily and accumulations of the decisions reflect tactical decisions together with strategic decision in the end. Operational decisions are guided by developed rules that led to the appropriate choice. Micro decisions are similar to operational decisions. Operational decisions apply to all the customers while micro decisions are designed for specific customers. Micro decisions take into consideration the existing information and predict on possibilities when making decision on a particular customer. Financial decisions are inevitable when in business. Financial decisions are made by the owners and the top most managers of the organization. At the initial stages of starting the business, the owners find different avenues where they can source funds. They then identify the most important sources and pursue them. When the business grows financial decisions are concerned with the management of cash flow. Moreover, business financial decision could be made to purchase new assets. The business owners may require the expertise in accounting and financial matters to pursue certain ideas or get insight. Another important decision is about the structure of the business. Business structure decisions makes a business individually owned, a partnership or a limited liability company. The different structures get different treatment when it comes to liability, sharing of the profit and losses, and taxation. The legal structure is important because it dictates who is responsible for making decisions (William, 2001). The business relies on human resources to get the work done to realize the goals. Human resource decisions can be regarded as relating to the assets of the organization. Human resource decisions are made by the owner or appointed managers in a business, who will work closely with the employees. The decisions consist of recruiting the manpower. The top management or owner lay down the criteria on how to recruit personnel. They also come up with rules on how to conduct self at work. Significant decision is made on the job description, duties and roles of a specific employee related to training and experience. The owner and top management come up with remuneration structure and benefits that an employee is entitled to. Another relevant decision that was faced dealt with the company. Company decisions on vision and objectives of the organization were discussed. This entails finding out the appropriate activities, ethics and policies required in the organization. In addition, company decisions clearly reveal the course of direction to be used in case of conflict. Marketing decisions target marketing the product of the organization. A decision on the target customers and the best way to advertise are made. Marketing decision also includes the possibility of a sale, offer, promotion and discounts. Marketing decisions affect the entire business and require support from the experts. Work schedule decisions are similar to operational decisions. The decisions give a plan of how people will work and their specific duties. Work is distributed according to resources, remuneration, and working hours (Harvard Business School Press, 2006, p. 64). According to Maital (2011, p. 5) decision making is no longer a preserve of the top management in today’s business. Low level managers have been involved in decision making because of their expertise and experience in the specific field. When the business idea is developed one of the significant choices is to choose a specific design and plan to follow it. The design will guide all decisions in maintaining a specific idea. Then the scope of market is considered. The potential customers, competitors and influences of the market are considered when executing the decision. The company finds a way to generate funds and ensure they reach out to the targeted customers. Harnish and Collins (2012, p. 24) indicate that business decisions made have an impact on the outcomes. Well developed decisions are unique and lead to success if carefully planned. They entail single ideas and are made to support the decision. 3. Explanation of which decision was made and why. Strategic decision was made by the owner of the company to specialize on selling computer software. The reason was to concentrate on the specific idea of selling computer game. The top management was concerned with the replacement of the computers. They approved that the computers can be renewed annually. The top management permitted the use of resources and sourced for funds that can be used as capital for the business. Operational decisions were inevitable and occurred on a daily basis. The employees assisted customers to make the most appropriate choice that fitted their needs. The employees were required to sell to customers and give good product and service to facilitate gaining and retaining new customers. Tactical decision and human resource decisions gave administrative support in the business. The employees were organized in the working place according to capabilities and given roles. Employees who had successfully met their target were given rewards and adequate compensation for their hard work. This was an effective way of increasing and maintaining their motivation at work. Marketing the product became important because there was need to advertise in the social media. The social media was chosen because most customers in need of software would find out if they can purchase it online. To execute the strategic decision, financial decision on acquiring additional capital was made. This is because there is need to replace the computers annually. Moreover, the price of the product was reviewed and reduced to encourage increase in sales. 4. Rationale for why these decisions may be important in a real business context. All decision making in the business were important because they served a specified purpose. Operational decisions were the most significant because they are concerned with the implementation of daily activities in the business. Good ideas that consisted in other business decisions can only be a success if they are implemented in the correct way. Operational decisions were essential and have the potential of causing growth. Operational decisions are technical and contributive to the execution of the strategic growth. Operational decisions have an impact on the customer because they are accomplished in the selling. Strategic decisions enable the business have a common objective. They represent the objective of the company. Since they are supported by the owner or top management, their support leads to success. The decisions involved funding and major changes that gave the organization a unique identity. When the owner chooses to sell software, they purchased the necessary facilities and developed software that will be outstanding. They funded or borrowed capital to support the strategy. The organization required employees at different levels to help in selling, supervision and management. Employees assisted in developing, marketing, selling and administrative duties. Human resources interacted with customers and answered all the enquiries. They explained to the customers how a product is used and got the feedback from the customer. The personnel contact with the customer could affect the response and perception of the customer to the company. The middle level managers provide administrative duties and assist the employer to recruit. The owner and the top management may not have the actual knowledge relevant in specific fields. They will ask experts in software design, marketing or accounting to assist according to their level of expertise and department. Another decision was marketing the product. The aim was to create awareness and persuade many buyers to purchase. The social media advertising is an effective way of increasing sales where a network of friends recommends the product to others. Advertising required financing. 5. Description of the consequences of the decision on the business. Proving capital to facilitate in the business decision making provided a platform for support. Marketing and advertising was a success. A large number of responses on the advertised products were received. There was an increase in the number of enquiries and the targeted sales were realized. Because of the work load, additional employees were recruited. Employees were employed and demonstrated a high level of professionalism. The cash flow was favorable and the company extended benefits to the employees by rewarding their hard work. Administrative support organized and provided support that was required to run day to day activities. The success in business decision making experienced can be attributed to the careful planning from the owner and the top management. There was a demand for software and when it was availed the buyers were willing to purchase. The result was increased revenue. 6. Outcome of the simulation. The simulation created understanding about decision making in business. The management exercise gave an experience of the different levels of decision making and the risk they carry. Decision concerning strategy, finance, human resource, operations and administration affect the business. The capacity to make decisions and relate them with real business situation improved. In addition, the simulation increased knowledge on how different stakeholders in the company interact to make decision. The outcomes of the simulation gave a clear picture of the relevant decisions in a business and their consequences. The simulation gives an opportunity to make decision in a business and develop analytical skills necessary for decision making. By engaging in real business decision making, there was clarity on the structure of decision making. Different people have different responsibilities that are related to their qualification, position and expertise. Planning is an integral part of decision making and is involved at all levels. 7. Conclusion. SimVenture simulation created awareness of the significant decisions in a business. Decision faced included: strategic, tactical, operational, micro, financial, structure, human resource, company, marketing and work schedule decisions. The decisions vary in their level of importance and impact upon implementation. The decisions are made according to level of responsibility, expertise and position. In the simulation activity strategic, operational, tactical, financial, human resource and marketing decisions were made. The decisions gave way for a specific idea of selling the software. Other decisions were in line with the strategy. Marketing the product and supporting the decisions by availing financial resources was a noteworthy action in coming up with a decisions. In order to make the business function, employees were recruited to conduct the different roles in the organization. Marketing the product on social media created awareness and led to increased sales. They made operational decisions as they made sales on a daily basis. The decisions are important because they contribute to the overall success of the company. SimVenture provided a real business environment experience where the outcomes of the decisions become tangible. The simulation was a success because understanding of decision structure and articulation was gained. Strategic, tactical, operational, financial and human resource decisions have a great impact on the outcome of the business. Bibliography Harnish, V and Collins, J 2012, Fortune The Greatest Business Decisions of All Time: How Apple, Ford, IBM, Zappos, and others made radical choices that changed the course of business.  Time Home Entertainment, New York.. Harvard Business School Press 2001, Harvard Business Review on Decision Making. Harvard Business Press, Harvard, United States. Harvard Business School Press 2006, Harvard Business Essentials, Decision Making: 5 Steps to Better Results. Harvard Business Review Press, Harvard, United States. Maital, S 2011, Executive Economics: Ten Tools for Business Decision Makers.  Free Press, New York. William, S W 2001, Making Better Business Decisions. SAGE Publications, California. Read More